Former ambassador Thomas Foley reported to the office of then US Secretary of State Condoleezza Rice on Mr Ahern's travails at the Mahon Tribunal.

The ambassador said that while allegations of corruption remained, "almost no one believes Ahern took bribes for personal gain".

"His frugal lifestyle is apparent to all," the ambassador wrote.

The comments are contained in a cable sent in October 2007 when Mr Ahern comfortably defeated a motion of no confidence tabled by Fine Gael following disclosures at the tribunal.

The dispatch was one of 14 cables dealing with the tribunal sent from the US embassy in Dublin.

Tribunal

The cables reveal how embassy officials followed the tribunal closely and reported in detail to Washington and elsewhere on the unfolding evidence and reaction to it.

Assessments were made of the stability of the Fianna Fail-led coalition governments with the Progressive Democrats and the Greens following each new disclosure about Mr Ahern's personal finances.

The tribunal is yet to report following its investigations into several sums of money received by Mr Ahern, many of which the former Taoiseach described "dig-outs" from friends.

Despite his acceptance that Mr Ahern had not acted corruptly, it is clear from the cables that Ambassador Foley still recognised the allegations were very damaging.

Even after Mr Ahern comfortably defeated the no confidence motion, Mr Foley remarked: "He is not out of the woods."

The ambassador briefed Ms Rice's office that Mr Ahern's political rivals "scent blood and continue to highlight alleged inconsistencies in his testimony in the hopes of damaging his political credibility".

In a follow-up cable on the issue in January 2008, the ambassador went on to predict that the tribunal revelations "could mortally wound" Mr Ahern. However, he said: "For the time being, Ahern is showing no signs of giving up or of shedding his reputation as the 'Teflon Taoiseach' who consistently manages to slide out of political difficulties."

The comments were made three months before Mr Ahern finally announced his intention to resign as Taoiseach, claiming the tribunal was distracting the Government from its task of governing.

In another April 2008 cable, marked "confidential", Ambassador Foley quoted a Department of Foreign Affairs official, who believed Mr Ahern had been "sincerely worried that his loss of credibility" would hurt the second campaign to get the Lisbon Treaty ratified.